5 Market Forces That Are Driving Digital Transformation

Big data, the IoT and mobile among them

Emerging digital expectations are changing customer loyalty to traditional products and brands.
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In the last few years, manufacturers and industrial organizations around the world have been investing more heavily in digital programs and initiatives to help accelerate the era of IT-optimized smart manufacturing. In fact, in the United States, the number of industrial device-to-device connections is expected to rise to nearly 180 million in 2020 from approximately 50 million in 2014.

In China, the rise in machine digitalization is projected to be double that of the U.S. in 2020. As digitization provides a path to frame, define and create Industrial Internet of Things (IIoT) strategies, many organizations have started to look at what is possible in the age of Industry 4.0 by embracing smart manufacturing.

However, despite global businesses’ rapidly increasing ability to unlock value from information, most companies are still nowhere near capable of dealing with the flow of information across the extended enterprise. Manufacturers, for example, face intense pressure to improve the way they manage product and engineering information.

Manufacturers’ first-generation processes and systems, built on 20-year-old technologies for 20-year-old computing environments, can’t meet new demands. They’re being left behind as new needs emerge for content management, process management and information collaboration. Ad-hoc workarounds often leave content insecure, out of compliance, or out of date.

Here are the five biggest forces intensifying manufacturers’ interest in new technologies and digital transformation:

1. Mobile and social

The rise of mobile and social technologies has changed not only where we work, but how we work. IDC forecasts the U.S. mobile worker population to surpass 105 million by 2020. Manufacturing organizations are under tremendous pressure to support connected, tech-savvy employees whose expectations have been shaped by consumer web services.

Today’s employees expect to find and share business and product-related information as easily as they can browse and buy a book online. They also expect their company systems to support remote and collaborative working styles. Millennials are highly mobile, always connected and demand IT solutions that allow them to get their work done independently of location, network and device. Their expectations for ease of content access intensify the pressure on IT organizations to modernize their ECM strategy.

2. Evolving customer expectations

With customers able to connect 24/7, the expectations have grown that their needs will be met not only through their chosen platforms but around the clock too. Emerging digital expectations are changing customer loyalty to traditional products and brands, as well as opening up new threats. To meet these new expectations, manufacturers face disruptions across the product lifecycle. Not only must they innovate faster, but they also must create products that are software enabled and connected (e.g. cars and even tractors).

These next-generation products require diverse engineering teams, who previously may have created unrelated products, to collaborate. These product lifecycle management changes must be supported with new forms of information that can be readily shared across the enterprise—and with partners and customers outside the firewall. Orchestrating product-related information across divisions, geographies, expertise and roles in the product lifecycle is a more complicated challenge than ever before.

3. Value of the extended enterprise

Exponential growth in connected activity and information flow is reshaping the modern manufacturing firm. Today, businesses are often a web of companies, contractors, suppliers, resellers, employees and customers. The ability to share content and process effectively across the extended enterprise is a must for modern manufacturers.

Manufacturing firms are extending their value chains. They use external collaborators for everything from product design and development, to marketing, sales and service. Partner and supplier input is crucial for optimized sourcing strategies and getting products to market. Manufacturers are investing in technologies that will optimize processes, increase transparency and facilitate collaboration throughout all levels of the value chain.